Bitcoin slid below $72,000 on Thursday as the cryptocurrency extended its slide, while gold broke below the $4,000 level that had held it for weeks. The twin slide follows hotter-than-expected US inflation data, which has pushed up expectations of another Federal Reserve rate rise in December and lifted the dollar to near a 19-month high.
Bitcoin traded near $71,777 on Thursday, according to CoinGecko, down about 3.3 percent over 24 hours and 8.4 percent over the past week, after trading in a $71,238 to $74,695 range over the past day. The coin has now fallen through the $72,000 level it held earlier in the week, and is trading below its 200-day average near $73,173, after a sharp after-hours drop in Nvidia shares.
ETF Outflows Stretch to a Fifth Day
Money continues to leave US spot Bitcoin exchange-traded funds. Investors pulled a net $299.8 million from the funds on Wednesday, according to data from Farside reported by FXEmpire, with BlackRock’s fund accounting for $269.7 million of the outflows. The selling marks a fifth straight day of outflows, and analysts say the steady redemptions are one of the two main headwinds for Bitcoin, alongside rising rate-hike expectations.
October’s consumer price index rose 0.4 percent month on month, above the 0.3 percent economists had expected, while core prices rose 0.3 percent against a 0.2 percent forecast. Markets now price in roughly an 87 percent probability of a 25-basis-point rate rise in December, according to TradingKey, with the 10-year Treasury yield near 5 percent.
Gold Loses the $4,000 Floor
Gold has fared no better. The metal traded near $3,872 on Thursday, down 2.9 percent on the day, after breaking below the key $4,000 support level. Yesterday gold was rebounding toward $4,050, so today’s slide below $4,000 is a sharp reversal, and silver has slipped with it. Ether, meanwhile, traded near $2,016 on Thursday, down about 2.2 percent, according to CoinGecko.
The ratio of Bitcoin to gold now sits near 18.5, meaning one Bitcoin buys about 18.5 ounces of gold. Friday’s US producer price report could set the next move: if the dollar and Treasury yields keep rallying, analysts warn of further pressure on both Bitcoin and gold. For Bitcoin holders who watched the coin slip below $74,000 on Wednesday, the question is whether the break below the 200-day average near $73,173 opens the way toward $70,500.
